Shimla: The Himachal Pradesh High Court has stayed the de-allocation of a coal block in West Bengal to Himachal EMTA Power Ltd (HEPL) by the Union Coal Ministry.

The Interim orders were passed by the court on a petition filed by HEPL, challenging the letter de-allocating the coal block and the deduction of 50 per cent of the bank guarantee, amounting to Rs 6.67 crore.

A division bench of Justices R B Misra and Surinder Singh asked the Coal Ministry to file its response within four weeks and listed the matter for January 9.

HEPL is a joint venture of the state-owned Himachal Pradesh Power Corporation Limited (HPPCL) and Eastern Minerals and Trading Agency (EMTA) for setting up a 500 MW pit-head coal-based thermal power plant at Raniganj in West Bengal.

The petition stated that the Union Coal Ministry allotted the coal block jointly to the petitioner and JSW Steel mining and developing captive coal for meeting the proportionate share of coal requirement in the respective power plants of the petitioner and JSW Steel.

It said the petitioner was a joint venture and was selected through a competitive bidding process and added that the joint venture was formed to achieve the objective of setting up a 2x250-MW pit-head coal-based thermal power plant to provide thermal power primarily to Himachal Pradesh.

Acting on the recommendation of the Inter-Ministerial Group (IMG) on coal, the coal ministry had de-allocated the Gourangdih ABC coal block allocated jointly to HEPL and JSW Steel on November 23 on the ground that they had failed to develop it.

It has also decided to deduct 50 per cent of their bank guarantee, which amounted to Rs. 6.67 crore. The block has estimated coal reserves of 131.7 million tonne.

State government officials said that mining was not initiated as more than 50 per cent of the coal block area was thickly populated and mining was not possible in such places. "We had been demanding allotment of an alternative block in its place," an official said.